National Government Services Inpatient Review September 29, 2009

1. Greater New York Hospital
Association
National Government Services Inpatient Review
p
September 29, 2009
POEA0515 (09/09)

2. Disclaimer
National Government Services, Inc. has produced this material as an
informational reference for providers furnishing services in our contract
jurisdiction. National Government Services employees, agents, and
staff make no representation, warranty, or guarantee that this
compilation of Medicare information is error free and will bear no
error-free
responsibility or liability for the results or consequences of the use of
this material. Although every reasonable effort has been made to
assure the accuracy of the information within these pages at the time of
y p g
publication, the Medicare program is constantly changing, and it is the
responsibility of each provider to remain abreast of the Medicare
program requirements. Any regulations, policies and/or guidelines cited
in this bli ti
i thi publication are subject t change without f th notice. C
bj t to h ith t further ti Currentt
Medicare regulations can be found on the Centers for Medicare &
Medicaid Services (CMS) Web site at http://www.cms.hhs.gov.
2

3. Session Objectives
• To provide an overview of the NGS Inpatient
Review
• To describe Medical Review tools and criteria for
decision making
• To summarize Medical Review findings
• To highlight implications for hospital providers
3

4. Agenda
• Background Information
– Transfer of review responsibility to FIs/MACs
– Data analysis
y
– Targeted DRGs
– Types of review
• Medical Review Tools and Decision Making
• Key Findings
• Learning Points for Hospitals
4

5. Background Information
• The responsibility for review of Inpatient PPS claims
p y p
moved from the Quality Improvement Organizations
(QIOs) to the FIs/MACs based on CMS Change Request
(CR) 5849 published 08/07/2008
5849,
• Data analysis targeted the review focus, using paid
claims data covering January 1 – June 30, 2008
• Specific DRGs targeted and analyzed
• Hospitals varying significantly from peers selected for
review
i
• Pilot Project review began in January 2009
5

6. Targeted DRGs
• Medical Necessity of Inpatient Admissions –
Brief Stay
– DRGs:
• 313 – Chest pain
• 391, 392 – Esophagitis, gastroenteritis and misc.
digestive disorders with and without MCC
disorders,
• 640, 641 – Nutritional & misc. metabolic disorders with
and without MCC
6

7. Targeted DRGs
• DRG Validation Review
– 061, 062 and 063 – stroke-related DRGs
– 064, 065 and 066 – Intracranial hemorrhage DRGs
– 067 and 068 – non-specific CVA DRGs
– 069 – Transient cerebrovascular ischemia
7

8. Types of Review
• Medical Necessity of Inpatient Admission, Brief
Stay – review to determine if complexity of care,
intensity of services and medical necessity of
i t it f i d di l it f
inpatient admission are supported in the medical
record
• DRG Validation – review of medical record and
coding to verify correct DRG assignment
8

9. Medical Review Tools and Decision
Making Criteria
M ki C it i
• Criteria for decision making – medical necessity
necessit
of admission review
– Use of InterQual criteria as first step in the medical
criteria,
necessity determination
• Severity of illness
• Intensity of services
– Clinical judgment of reviewers -- nurses, certified
coders,
coders and contractor medical director
– Key Question: Does the medical record support the
level of care provided?
9

10. Medical Review Tools and
Decision Making Criteria
• DRG Validation Review – a review of the
medical record documentation to ensure that the
DRG assignment is supported
• Performed by certified coders with inpatient
coding and DRG validation experience
• Tools include:
– ICD-9-CM Coding Manual
– Official Guidelines for Coding and Reporting
– The Coding Clinic for ICD-9-CM
g
10

11. Key Review Statistics
• Medical Necessity of Inpatient Admissions
y p
– Claims: reviewed: 472; denied: 448
– Claim Denial Rate: 94.9%
– Dollar Denial Rate: 97.9%
• DRG Validation
– Claims: reviewed: 230
– DRGs changed: 20 (with error rate of 8.7%)
– Claims denied: 12
– Admission Denial Rate: 5.2% (admissions denied/
total cases reviewed)
11

12. Key Review Findings
• Medical Necessity of Admission – Brief Stays
– Majority of claims reviewed showed services were
medically necessary, but did not require an inpatient
level of care.
– DRG 313 – chest pain
– Constituted significant percent of claims reviewed
– Laboratory and EKG results were negative
– No acute findings
– Clinical status was stable
12

13. Key Review Findings
• DRG 640 – Nutritional & misc. metabolic
disorders with and without MCC
– Patient evaluated and treated in a relatively brief
period of time
– Laboratory results did not trigger inpatient criteria for
admission
13

14. Key Review Findings
• DRG Validation Review
– Overall, findings less dramatic
– Errors reflected both DRG payment increases and
decreases
– Evidence of excellent physician documentation and
accurate coding in many cases
– Some cases had insufficient, late or conflicting
documentation
– Error rate varied significantly from hospital to hospital
– Surprise finding: Twelve admissions were denied –
medical necessity of IP admission not supported.
14

15. You are Responsible for
• Knowledge of the requirements necessitating inpatient
admissions
• Working in conjunction with physicians to ensure
documentation of admission status is clearly defined by
a signed and dated physician order.
• Monitoring the documentation of clinical rationale for
level of care decisions in the medical record.
• Ensuring the documentation is complete and timely to
support DRG assignment.
15

16. Questions
Thank you for the opportunity to discuss
our review findings with y
g you.
As additional questions arise contact us
arise,
using the information that follows.
16

17. Clinical POE Contact Information
Telephone Inquiries
NGS Clinical POE Toll-Free Line
800-338-6101
E-mail
E mail Inquiries
EastClinicalEducation@WellPoint.com
No PHI Please!
17

18. National Government Services Reviews Inpatient Claims --
What did the DRG Validation Review Reveal?
National Government Services (NGS) assumed responsibility for the review of
Inpatient PPS services based upon CMS Change Request 5849, published in
August 2008. The change request transferred the IP PPS review responsibility
from the Quality Improvement Organizations (QIOs) to the Fiscal Intermediaries
(FIs) and Medicare Administrative Contractors (MACs).
During the initial pilot project, NGS initiated two reviews – one focusing on the
medical necessity of inpatient admissions and the other focusing on validation of
the DRG billed to Medicare. The second review, known as the DRG validation
review, will be the focus of this article. The DRG validation review for the pilot
project focused on hospitals in the states of Wisconsin, Michigan, New York and
Connecticut.
The DRG Validation review was initiated after data analysis first targeted specific
DRGs and secondly, hospitals billing those DRGs. The DRGs included in the
study are:
• 061, 062 & 063 – Stroke-related DRGs
• 064, 065 & 066 -- Intracranial hemorrhage DRGs
• 067 & 068 – Non-specific CVA DRGs
• 069 – Transient ischemic attack (TIA)
Review Statistics
The pilot project review included 396 cases from the four states. The overall
denial rate was 5.8%; however, the denial rate does not fully reflect the severity
of the errors identified in the review.
• The number of cases where the DRG decreased was balanced by a
similar number of cases where the DRG increased.
• The net error rate, balancing increases and decreases, was only 5.8%
• There were many examples where hospitals had excellent physician
documentation and high quality coding.
Overall Findings Provide a Clearer Focus
While the net increases and decreases result in only a 5.8% error rate, there
were significant variances when comparing individual provider error rates. Error
rates ranged from 0% for some providers to a high of 24%. A 24% error rate
would not meet the standards for many hospital quality and compliance
programs. Review the findings below for areas where your hospital can make
changes.
• Untimely discharge summaries – A review of records indicates that
discharge summaries are frequently dictated long after the patient’s
Posted 09/15/2009 on NGS WebSite
www.ngsmedicare.com

19. discharge. This means that full information in not available to coders and
the resulting bill to Medicare is not based full information from the
physician. The Medicare Hospital Conditions of Participation section
relating to medical record services (482.24 (c) (2) (vii) specifies that
records must contain “’final diagnosis with completion of medical records
within 30 days following discharge.”
• Incomplete or conflicting physician documentation – During the review,
some records reflected inconsistent documentation on the patient’s major
reason for admission. As an example, one physician progress note states
the patient had a stroke while the other reflects the diagnosis of TIA, and
both with equal frequency. In such cases, the record was reviewed by the
contractor medical director to identify the principal diagnosis.
• Failure to query the attending physician – In situations where the
physician’s documentation is incomplete or conflicting, the coder has the
responsibility to query the physician for clarification. Only one provider
documented the use of the query process.
• Inaccurate coding – Primary factors contributing to coding errors included
the failure to use official coding guidelines for the appropriate timeframe
and the failure to read physician documentation carefully and thoroughly.
Inpatient review will continue to be a key focus in the Fiscal Year 2010 Medical
Review Strategy. Review your policies and procedures to ensure that inpatient
records support an accurate Medicare claim.
Posted 09/15/2009 on NGS WebSite
www.ngsmedicare.com

20. Limitation on Recoupment
(935) for Providers, Physicians,
( ) , y ,
and Suppliers Overpayment
POEA0520 (09/09)

21. Disclaimer
National Government Services, Inc. has produced this material as an
informational reference for providers furnishing services in our contract
jurisdiction. National Government Services employees, agents, and
staff make no representation, warranty, or guarantee that this
compilation of Medicare information is error-free and will bear no
responsibility or liability for the results or consequences of the use of
this material. Although every reasonable effort has been made to
assure the accuracy of the information within these pages at the time of
publication, the Medicare program is constantly changing, and it is the
responsibility of each provider to remain abreast of the Medicare
program requirements. Any regulations, policies and/or guidelines cited
requirements regulations
in this publication are subject to change without further notice. Current
Medicare regulations can be found on the Centers for Medicare &
Medicaid Services (CMS) Web site at http://www cms hhs gov
http://www.cms.hhs.gov.
2 National Government Services, Inc.

22. Acronyms
Centers for Medicare & Medicaid
CMS
Services
EFT Electronic Funds Transfer
ERP Extended Repayment Plan (Loan)
FI Fiscal Intermediary
HHA Home Health Agency
Home H lth P
H Health Prospective P
ti Payment t
HHPPS
System
MAC Medicare Administrative Contractor
3 National Government Services, Inc.

23. Acronyms
Medicare Prescription Drug
Drug,
MMA
Improvement, and Modernization Act
MSP Medicare Secondary Payer
QIC Qualified Independent Contractor
RA Remittance Advice
RAP Request for Anticipated Payment
RHHI Regional Home Health Intermediary
SSA Social Security Administration
4 National Government Services, Inc.

24. Objective
• Give providers a better understanding of
the 935 recoupment process and how it
relates to the appeal process
5 National Government Services, Inc.

25. Agenda
• Background
• Definitions
• Overpayment Steps
• Appeals and how it p
pp pertains to limitation
on recoupment (935)
• Provider Payment Summary Screens
6 National Government Services, Inc.

26. Background – 935
• Medicare Prescription Drug Improvement and
Drug, Improvement,
Modernization Act of 2003, (MMA) Section 935
amended Title XVIII of Social Security Act to add
y
a new paragraph to Section 1893, (f)(2)(a)
– Requires CMS to change
• How it recoups certain overpayments to providers,
physicians, suppliers
• How it pays interest to provider, physician, supplier
provider physician
whose overpayment is reversed at subsequent
administrative or judicial levels of appeal
7 National Government Services, Inc.

27. Background – 935
• Final Rule defines
– Overpayments to which limitation applies
– How limitation works in concert with appeal
process
– Change in obligation to p y interest to
g g pay
provider or supplier whose appeal is
successful at levels above QIC
• R f
Reference: 42 CFR P t 401 (S b t F)
Part (Subpart F),
Part 405 Section 405.378
8 National Government Services, Inc.

28. What is an Overpayment?
• Medicare monies a provider has received
in excess of amounts due and payable
under Medicare
– Amount of overpayment is debt owed to
Federal Government
– CMS is required to seek recovery of
overpayment regardless of how it was
identified or caused
9 National Government Services, Inc.

29. Examples of Overpayments
• Payment for excluded or medically
unnecessary services
• P
Payment made as primary payer when
t d i h
Medicare should have paid as secondary
payer
10 National Government Services, Inc.

30. What is Recoupment?
• Recovery by Medicare of any outstanding
Medicare debt by reducing present or
future Medicare remittance advice
payments and applying amount withheld to
the indebtedness
11 National Government Services, Inc.

31. Limitation on Recoupment
(935)

32. Limitation on Recoupment For
Providers O
P id Overpayments
t
• SSA section 1893 (f) (2) (a) provides limitations
on recoupment of Medicare overpayments
• Providers are protected during initial stages of
p g g
appeal process
– At redetermination and reconsideration level
– Limitations do not affect providers appeal
rights and timeframes for appeals are not
affected
• Providers must decide to appeal to stop
recoupment
p
13 National Government Services, Inc.

33. Overpayments Subject to
Limitation on R
Li it ti Recoupmentt
• Determined post-pay denial of claims for
benefits for which a written demand letter
was issued
– Medicare Part A (Inpatient)
– Medicare Part B (Outpatient)
( p )
• Final claims associated with HHA RAP
under HH PPS, but not the RAP itself
,
– CMS Publication 100-04, Chapter 10,
Sections 10.10-10.12, 40.1, and 50
14 National Government Services, Inc.

34. Overpayments Subject to
Limitation on R
Li it ti Recoupmentt
• MSP recovery
– Where provider or supplier received a
duplicate primary payment and for which a
written demand letter was issued, or
– Based on provider s or supplier’s failure to file
provider’s supplier s
a proper claim with a third party payer plan,
p g
program, or insurer for p y
, payment for Part A
claims
15 National Government Services, Inc.

35. Scenarios – Post-Pay Denial
Post Pay
• ABC hospital was paid for an inpatient
claim. Medical records were requested
and upon review it was determined that
the hospital stay was not reasonable and
necessary.
necessary
• XYZ hospital was paid for an outpatient
claim which subsequently received a post-
l i hi h b tl i d t
pay denial.
16 National Government Services, Inc.

36. Scenarios – Post-Pay Denial
Answer:
• Claims will be subject to 935 process
• Claims will be adjusted
• Adjustments will appear on remittance
advice as 935 eligible
• Demand letters will be issued, advising
p
providers that an overpayment occurred
p y
17 National Government Services, Inc.

37. Overpayments NOT Subject to
Limitation on R
Li it ti Recoupment
t
• Provider-initiated adjustments
• All other MSP recoveries except those
previously identified
• Overpayments arising from a cost report
determination
• HHA RAP under HH PPS
• Hospice Cap calculations
• Accelerated/Advanced Payments
18 National Government Services, Inc.

38. Rebuttal Process
• Opportunity for provider to rebut any
proposed recoupment action
– Is not an appeal of overpayment
determination
– Will not delay recoupment before a rebuttal
y
response has been rendered
– Provider advised of decision in 15 days from
receipt date of rebuttal
• 42 CFR, Part 405.373 through 405.375
19 National Government Services, Inc.

39. Steps in Overpayment Process

40. Step One – Overpayments, Part A
• As a result of post pay review or MSP
post-pay
recoveries and during Part A claim
adjustment process
– If adjustment results in refund to provider
• Existing underpayment policies are followed
– If adjustment considered to be an
overpayment and 935 rules apply
• Claim will be marked as being eligible for limitation
on recoupment protections
21 National Government Services, Inc.

41. Step Two – Overpayments,
Demand Letter
D d L tt
• Adjustment triggers creation of demand letter
and accounts receivable
• First demand letter will state
– To stop recoupment under provisions of Section 935
of MMA, providers must submit a valid appeal request
(redetermination) of the overpayment within 30 days
from date of demand letter
• Interest begins to accrue after 30 days
– Provider may submit a rebuttal statement (which is
y (
not an appeal request) to any proposed recoupment
action
• Rebuttal rarely used and does not stop recoupment
22 National Government Services, Inc.

42. Step Two – Overpayments,
Demand Letter
D d L tt
• Recoupment will begin on the 41st day from date
of first demand letter if
– Payment is not received in full, or
– Acceptable request for ERP, or valid request for a
contractor redetermination is not date-stamped in our
mailroom by day 30 from date of demand letter
y y
• If an appeal is filed later than 30 days, Medicare
will stop recoupment at whatever point appeal is
received and validated
i d d lid t d
– Medicare may not refund any recoupment already
taken
23 National Government Services, Inc.

43. Scenario – Overpayment Part A
• It has been determined that the inpatient
claim from ABC hospital should not have
been paid What is going to happen next in
paid.
the 935 process?
• Answer: Claim will be adjusted and this
overpayment will trigger a demand letter
be sent, which will provide all of the details
o
on 935 process.
p ocess
24 National Government Services, Inc.

44. Overpayment Demand Letter Tips
• Timeliness of the appeal request is important
– During appeal process, interest continues to accrue
– Once first two levels of appeal are completed, if
appeal decision is Affirmation, collection may resume
within designated timeframes
• Provider who has filed a bankruptcy petition or is
involved in a bankruptcy proceeding, should
contact National Government Services
immediately
25 National Government Services, Inc.

45. Step Three – How to Stop Medicare
Recoupment after Fi t D
R t ft First Demand L tt
d Letter
Timeframe NGS Provider
Date of Demand Notification received of
Day 1
Letter overpayment determination
Provider can pay by check
Day 30 – Interest
Day 30 within 30 days and avoid
begins to accrue
interest
Provider can appeal and
No recoupment
Day 1-40 potentially limit recoupment
occurs
from occurring
Provider can appeal and
Day 41 Recoupment begins
potentially stop recoupment
26 National Government Services, Inc.

46. Did You Know…
• Providers have a choice regarding how
they want to respond to demand letter
– P b check within 30 d
Pay by h k ithi days ( t i t
(stop interest)
t)
– Allow recoupment from future payments
–RRequest Extended R
t E t d d Repayment Pl (l
t Plan (loan)
)
27 National Government Services, Inc.

47. Appeals and How They Pertain to
Limitation on Recoupment

48. First Level Appeal – Redetermination
• Upon receiving your valid request for a
redetermination of overpayment, we will take the
following actions
– Cease recoupment of overpayment that is subject of
appeal, or will not initiate recoupment if it has not yet
started
– Retain any amounts recouped, if already collected
before receiving request for redetermination, and
apply them first to interest and then to principal
– Continue to collect any other debts providers might
owe, but will not withhold or place in suspense any
monies related to this debt, while it is in appeal status
, pp
29 National Government Services, Inc.

49. First Level Appeal – Redetermination
• Redetermination can have three possible
outcomes
– F ll reversal (f
Full l (favorable)
bl )
– Partial reversal (partially favorable)
– F ll Affi
Full Affirmation ( f
ti (unfavorable) bl )
30 National Government Services, Inc.

50. Scenario – First Level Appeal
• ABC hospital received a demand letter stating
that an overpayment occurred and the hospital
does not agree. What should be done to ensure
the
th monies are not taken back?
i t t k b k?
• Answer: Within 30 days of receiving a demand
y g
letter an appeal must be submitted. On the
appeal request indicate that this is an
overpayment appeal and you are requesting a
redetermination. This will stop recoupment until
a decision is made on the appeal
31 National Government Services, Inc.

51. Full Reversal of Overpayment Decision
• In this instance we will:
– Reimburse provider for covered
items/services
– Any recouped funds and interest paid will be
repaid to the provider
32 National Government Services, Inc.

52. Partial Reversal of the Overpayment
Decision
D i i
• In this instance (in which debt is reduced
below initial stated amount) we will:
–RRecalculate correct amounts of both
l l t t t f b th
underpayment and overpayment
– Make appropriate payments to provider if due
– If necessary, issue a revised demand letter for
the newly calculated overpayment amount
33 National Government Services, Inc.

53. Full Affirmation of the Overpayment
Decision
D i i
• With this “unfavorable” decision that
unfavorable
upholds the overpayment determination,
we will
– Issue the second or third demand letter (as
appropriate)
34 National Government Services, Inc.

54. Timeframe for Medicare Recoupment
Process Aft Redetermination
P After R d t i ti
Timeframe NGS Provider
Day 60 following Date NGS is notified Must pay
revised notice of by QIC that they overpayment or must
overpayment t have received a
h i d have submitted
h b itt d
following request for request for second
redetermination reconsideration level appeal
Recoupment could
Day 61-75 st day Appeal or pay
begin on the 61
Can still appeal and
Recoupment begins recoupment will stop
Day 76
or resumes on receipt date of
appeal
35 National Government Services, Inc.

55. Second Level Appeal – Reconsideration
• Providers can stop Medicare from
recouping any payments at a second point
in the recoupment process by filing a valid
request for reconsideration with the QIC
within 60 days of the Medicare
Redetermination Notice
36 National Government Services, Inc.

56. Second Level Appeal – Reconsideration
• When we receive notification from the QIC of
your valid and timely request for reconsideration,
we will
– Cease recoupment of overpayment or not initiate
overpayment,
recoupment if it has not yet begun
– Retain amount recouped, and apply it first to interest
and then to principal (if recoupment process had
begun before reconsideration request was received)
– Continue to collect other debts that provider might
owe, if overpayment is appealed and recoupment
ti l d d t
stopped, but will not withhold or place in suspense
any monies related to this debt while it is in appeal
status
37 National Government Services, Inc.

57. Second Level Appeal – Reconsideration
• QIC reconsideration can have three
possible outcomes
– F ll Reversal (favorable)
Full R l (f bl )
– Partial Reversal (partially favorable)
– Affi
Affirmation (unfavorable)
ti ( f bl )
38 National Government Services, Inc.

58. Full Reversal
• National Government Services will adjust
the overpayment and amount of interest
charged once notified by QIC that the
decision resulted in an adjustment
39 National Government Services, Inc.

59. Partial Reversal
• This decision reduces the overpayment
• Medicare:
– Reprocesses based on QIC reconsideration decision
– If necessary issues a revised demand letter for
revised overpayment amount or make appropriate
payments of underpayment amount, if due
– May apply excess to any other debt (including
interest) that a provider might owe before releasing
payment
40 National Government Services, Inc.

60. Full Affirmation
• If QIC reconsideration results in
“unfavorable” overpayment decision
– Recoupment may be resumed on the
30th calendar day after the date of notice
of reconsideration
– Gives providers time to make p y
p payment
or to request a repayment plan
41 National Government Services, Inc.

61. Third Level of Appeal – Administrative
Law Judge (ALJ)
L J d
• Whether or not a provider subsequently
appeals overpayment to ALJ, Medicare
Appeals Council or Federal court
Council,
– Medicare will continue to recoup until debt is
satisfied in full
42 National Government Services, Inc.

62. Third Level of Appeal – Administrative
Law Judge (ALJ)
L J d
• If ALJ reverses the Medicare overpayment
determination, Medicare will
– Refund both principal and interest collected
– Also pay 935 interest on any recouped funds that
Medicare took from ongoing Medicare payments
• If provider has any other outstanding
overpayments, Medicare will
– Apply the amount collected first to those
overpayments, and
– Any excess monies will then be refunded back to the
p
provider
43 National Government Services, Inc.

63. Status of Debt
• During redetermination and
reconsideration process, status is appeal
• Wh recoupment begins/resumes, status
When tb i / t t
will be changed to eligible for offset
44 National Government Services, Inc.

64. Voluntary Refund
• A voluntary refund submitted within 30
days avoids having to pay interest
Connecticut,
Connecticut New York Providers:
National Government Services, Inc.
J13 Part A-Voluntary Refund
P.O. B
P O Box 13078
Newark, NJ 07188
• http://www ngsmedicare com/NGSMedicar
http://www.ngsmedicare.com/NGSMedicar
e/PartA/Resources/Forms/0409_PartA_V
RF_V1.pdf
pd
45 National Government Services, Inc.

65. Extended Repayment Schedule (ERS)
• Any time a provider needs longer than 30
days to repay the full amount of an
overpayment, the provider should request
an extended repayment plan (ERP)
– Can be requested at any time during debt
q y g
collection process
– Submission within first 15 days may decrease
necessity t withhold all i t i payments
it to ithh ld ll interim t
– Demand letter includes contact information
46 National Government Services, Inc.

66. Did You Know…
• When a claim for an overpayment has
been adjusted and appears on remittance
advice,
advice overpayment shown appears as if
monies have already been recouped. That
is not the case.
case
47 National Government Services, Inc.

67. Remittance Advice and 935
• Claim adjustment correcting the claim data
will appear on the remittance advice
generated on the date of the demand letter
– Reason Code N469
• O
Overpayment amount is NOT subtracted
t ti bt t d
from the remittance payment
48 National Government Services, Inc.

68. Provider Payment Summary
Screens

69. Provider Payment
Summary Screens
PHI
PHI
PHI
50 National Government Services, Inc.

70. Provider Payment
Summary S
S Screens
51 National Government Services, Inc.

71. What We ve Learned Today…
We’ve
• Appeal rights and timeframes for filing an
appeal have not changed
• P id
Providers hhave t two opportunities t stop
t iti to t
recoupment
• Interest will begin to accrue on day 31(and
every 30 days after) but recoupment will
not start until after day 41
52 National Government Services, Inc.

72. Resources
• Change Request 6183
– http://www.cms.hhs.gov/transmittals/download
s/R141FM.pdf
s/R141FM pdf
• MLN Matters 6183
– http://www.cms.hhs.gov/MLNMattersArticles/
downloads/MM6183.pdf
53 National Government Services, Inc.

73. Resources
• Appeals Process Flowchart
– http://www.cms.hhs.gov/OrgMedFFSAppeals/
Downloads/AppealsprocessflowchartAB.pdf
Downloads/AppealsprocessflowchartAB pdf
• Medicare Appeals Process brochure
pp
– http://www.cms.hhs.gov/MLNProducts/
downloads/MedicareAppealsprocess.pdf
54 National Government Services, Inc.

74. Resources
• FI Appeals and QIC mailing addresses
– http://www.ngsmedicare.com/NGSMedicare/
PartA/Resources/ContactInformation/
Appeals%20_ContactInfo_PartA.aspx
• Recovery Audit Contractor Web site
– http://www.cms.hhs.gov/RAC
55 National Government Services, Inc.

75. Resources
• Voluntary Refund Forms
– Part A & FQHC
• http://www ngsmedicare com/NGSMedicare/PartA/
http://www.ngsmedicare.com/NGSMedicare/PartA/
Resources/Forms/0409_PartA_VRF_V1.pdf
–H
Home H lth/H
Health/Hospice
i
• http://www.ngsmedicare.com/NGSMedicare/RHHI/
Resources/Forms/0409_HHH_VRF_V1.pdf
Resources/Forms/0409 HHH VRF V1 pdf
56 National Government Services, Inc.

76. How to Calculate 935 Interest
Interest paid under 935 is only applicable at the Administrative Law Judge (ALJ) or further appeal
level when that decision results in a full or partial reversal of the prior decision and National
Government Services has retained recouped funds.
Medicare has the obligation to pay providers interest if the overpayment determination is
reversed at the first (redetermination) and second (reconsideration) level of the administrative
appeal process and the decisions are not put into effect timely. At these levels of appeal, interest
would continue to be payable by Medicare if the underpayment is not paid within 30 days of the
final determination decision.
The formula for calculating interest is simple ‐ Time x Rate x Amount ‐ For each recoupment
action:
1. TIME: Determine the total Julian days starting from the recoupment date and ending with the
ALJ decision date or the date on the revised notice with the new overpayment, if applicable.
Divide the number of Julian days by 30 to compute the number of 30‐day periods. The interest
will not be payable for any periods of less than 30 days in which National Government
Services had possession of the recouped funds.
2. RATE: Use the annual rate of interest in effect at the time of the ALJ decision date or from the
revised New Written Determination date and convert interest rate to a monthly interest rate.
(For example: The rate of interest as of July 17, 2009 is 11.25%. Convert annual Rate to a
monthly rate by dividing by 12.)
3. AMOUNT: The amounts that are to be used as the basis on which to compute interest earned
by the provider are those amounts that are credited to principal resulting from any
involuntary payments from the provider after the elimination/satisfaction of all Medicare debt.
Recouped monies applied to interest are not included in the determining the 935 interest. Only
those principal funds recouped via withholding (e.g., payments recouped under a defaulted
ERS or offset) are included. Do not include payments a provider makes under an ERS or other
voluntary payments made by the provider.

77. How to Calculate 935 Interest:
(935 interest at the ALJ and higher levels)
Fully Favorable Decision
Rate of interest
Recoupment Recoupment Length of time Interest Owed to
from ALJ
Amounts Date money held Provider
decision date
301 Julian Days
1. $9,062.00 March 7, 2007 12.5% $943.95
(10 months, 1 day)
230 Julian Days
2. $9,806.00 May 18, 2007 12.5% $715.02
(7 months, 20 days)
148 Julian Days
3. $9,136.00 August 8, 2007 12.5% $380.66
(4 months, 28 days)
Total 935 Interest owed to Provider $2,039.63
Calculation Example
Time x Rate x Amount = Interest
Time Rate Amount Interest
1. 10 months .125 divided by 12 $9,062.00 $943.95
2. 7 months .125 divided by 12 $9,806.00 $715.02
3. 7 months .125 divided by 12 $9,136.00 $380.66
935 Interest Owed to Provider $2,039.63
Reference: CMS Internet‐Only Manual (IOM) Publication 100‐06, Medicare Financial Management
Manual, Chapter 3, Section 200.6.2